A home loan is often the most significant financial burden an individual takes up in his/her lifetime. Since the loan amount is substantial, it is imperative to plan the repayment to its last details to avoid instances resulting in default of EMIs.
Access to a home loan EMI calculator can be worthwhile in this planning process. Online tools like these allow prospective home buyers to calculate and plan their repayment as per their suitability.
Know how a home loan calculator can aid in financial planning
- A precise and quick calculation
One of the biggest advantages of using an online calculator like this is its accuracy. One can calculate home loan EMIs manually by using the EMI = [P x R x (1+R)^N]/[(1+R)^N-1].
Here P is the principal, R is the rate of interest, and N is the number of months, i.e., loan tenor.
However, manual calculations are susceptible to mistakes, altering the final instalment amount and hampering the planning process. On the other hand, an online calculator like this uses an algorithm to figure out the final EMI figure without any fault.
Moving ahead, another issue with manual calculation is that it takes time. Whereas, with an online EMI calculator, one can get results within a couple of seconds.
Such calculators allow individuals to customise their home loan offers. Borrowers can insert loan-related figures like principal amount, interest rate, and tenor to compute the EMIs. Prospective borrowers can put different figures in those tabs and find a loan offer that suits their repayment capacity.
- Free to use
A home loan EMI calculator is free to use for everybody. They are available on various websites, and using them incurs no extra charge. Also, individuals can use them as many times as they want, for free.
- Compare between different loan offers
Another notable advantage of an EMI calculator for a home loan is that it allows prospective borrowers to compare different loan offers. Using these devices, applicants can compare housing loan interest rates, total payable interest, tenor, EMIs, etc., for different lenders and make a decision about their home loans accordingly.
- Additional information about a loan
An online EMI calculator like this also offers additional information about a loan. It includes access to the loan amortisation sheet. An amortisation sheet or schedule is a table that includes a detailed periodic payment structure of a housing loan.
Access to this sheet will allow individuals to comprehend their loan payment structure and details like interest payment and principal payment with every EMI.
Home loan EMI calculators are an integral part of repayment planning, owing to the convenience it offers. In addition, it helps prospective home loan applicants to find their ideal loan offer.
Knowing the EMIs before taking a home loan is vital, but one should also know about other factors that one can consider to make this process easier.
Points to check before applying for a home loan
Alongside the instalment amount, here are some crucial points to review before getting a loan –
Additional charges: Every loan includes additional charges like processing fee, secure fees, etc. Together, these charges can drive up the total cost of a loan. Hence, reviewing them beforehand is crucial.
Part-payment facility: A part-payment facility can aid borrowers to make lump sum payments at their convenience to reduce their loan burden. One should also learn about other home loan repayment options to choose from.
Top-up loan: Some borrowers might extend a top-up loan facility on a home loan balance transfer. It can allow individuals to meet any additional expense that they have. A top up loan has no end-use restriction so that borrowers can fund personal expenses as well.
Pre-approved offers: The availability of pre-approved offers can streamline the loan application process and save time. Such offers are valid on credit facilities like home loan, loan against property, etc. Borrowers can check their pre-approved offer by submitting their essential contact details.
Nonetheless, above all, it’s imperative to check the monthly obligation you may incur on account of a home loan. To that end, a home loan EMI calculator is a convenient financial tool. It offers accurate and quick results and allows individuals to make an informed decision before applying for a housing loan.